Universities are "desperate" to charge more for courses, in an effort to raise much-needed funds, the leader of the UK's vice-chancellors has said.

Diana Warwick, chief executive of Universities UK, said graduates needed to contribute more to the system, or face a "deterioration" in standards.

Her comments, to a fringe meeting at the Liberal Democrat conference in Brighton, came after the party's education spokesman, Phil Willis, accused Tony Blair of "blatant deception" over fees.

The government is planning to allow universities to charge undergraduates up to £3,000 a year for tuition. The current flat rate is £1,125.

'Unsustainable'

This, it says, will allow it to reach its target of getting "towards 50%" of young people into education by 2010.

Baroness Warwick said: "I think it is pretty universally understood that if we don't expand, it's students from non-traditional and low income backgrounds, who are perhaps the first in their family to try for a university place, who are likely to miss out."

She said universities had seen funding cuts of 37% between 1989 and 2002. During the same period, student numbers had grown by 94%.

"It's clear that this is unsustainable, and while I would defend the quality of what our universities offer at the moment, there is a real risk that the UK could lose its record for excellence in higher education, both in the UK and abroad.

"Everyone here will agree that all who have the potential to benefit from higher education ought to have the opportunity to do so.

We know debt deters poor students, and we know how hard we will have to work to overcome that

Diana Warwick, Universities UK

"I think it is pretty universally understood that if we don't expand, it's students from non-traditional and low income backgrounds, who are perhaps the first in their family to try for a university place, who are likely to miss out.

"So we need to expand higher education, and we need to pay for it somehow, because one thing is certain in all of this - someone always pays."

Lady Warwick added that every £1m spent on higher education generated £1.54m for the economy as a whole.

But the government's policy, despite a reinstatement of grants for poorer students, has led to fears of graduate debts exceeding £20,000 and has caused widespread protests by students and unions.

"We don't ask those who go to university to pay more because we want to saddle them with debts.

"We know debt deters poor students, and we know how hard we will have to work to overcome that, through bursaries and other means, and to persuade potential students from poor backgrounds that it's still worth it."